Or should I pony up for a usb 3.0 external hard drive? (my mobo will support it)
I intend to only use it for playing videos if that makes a difference.
I know close to nothing about hardware so let me know if you need more info.

3 Answers
3

I've streamed video off a 2.0 hard drive, but I wouldn't want to depend on it. If you have the ability to use eSATA, that would be your best bet, but fw 800 (or even 400) would work fine too. I stream music from an external right now that is fw 800, and it works just fine.

Guess I should clarify, fw 800 is MORE than enough to get great quality and dependable streaming. I wouldn't worry about 400 either, I have in the past had 2.0 HDs skip/slow while trying to stream music or videos.
–
JesseJun 15 '10 at 4:36

+1 for using eSATA, if your computer supports USB3, it also supports eSATA. And those are more likely to be compatible with other computers too
–
Ivo Flipse♦Jun 15 '10 at 6:21

Well, USDB 2.0 supports up to 420Mbps theoretical transfer rates, which narrows down to 320Mbps in practice (on a non shared bus).
That would be 40MB per second, I think most of the movies will fit in that bandwidth (consider that a compressed HD movie rip of 8GB long, say, 1 hour will need just 2.3 megabytes per second)